HTML, XML, XBRL: What’s the Difference?

HTML, XML, XBRL what’s the difference? HTML and XML are both mark up languages, but that’s where the similarities end. HTML (Hypertext Markup Language) is a way of “tagging” text to cause it display in a certain way. For example, HTML tags are used for putting a heading here, starting a paragraph there and making that text bold (if you’re a blogger, you probably know some of the tags and how they are used). By contrast, XML (eXtensible Markup Language) was designed for storing and transporting data. RSS (Really Simple Syndication) feeds are made possible by XML (if you don’t know what RSS feeds are and you like to follow certain Blogs or news sources, you should learn how to utilize RSS).

XBRL (eXtensible Business Reporting Language) is an XML based technology. In other words, XBRL can be used to store or transport data. What makes XBRL unique is that it is designed for business and financial data use. XBRL “tags” utilize standard taxonomies. The XBRL Consortium, an international non-profit, promotes the use of XBRL and develops standard XBRL specifications & taxonomies. There are many standard taxonomies that can be used for business and financial reporting (taxonomies for various accounting standards used around the world for example).

By tagging business data with a standard taxonomy (US GAAP taxonomy for example) the tagged data can be stored, moved from system to system and reported to outsiders (who can in turn understand the data in light of its standard taxonomy). XBRL can be read by many software programs (including Excel and Word) and understood when related to the standard taxonomy. XBRL files reported to the SEC (as an exhibit to the 10-Q or 10-K) and posted to company websites can be quickly downloaded into a software tool for ad hoc analysis. This makes the reported financial reports increasingly transparent.

Periodic reporting to the SEC and posting to company websites is just the first step on the road toward increasingly electronic and increasingly real time financial reporting. Get ready for the future of financial reporting!